>> From the Cube studios in Palo Alto and Boston, bringing you data driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> While the precise direction of VMware's future is unknown, given the plan Broadcom acquisition, one thing is clear. The topic of what Broadcom plans will not be the main focus of the agenda at the upcoming VMware Explore event next week in San Francisco. We believe that despite any uncertainty, VMware will lay out for its customers what it sees as its future. And that future is multi-cloud or cross-cloud services, what we call Supercloud. Hello, and welcome to this week's Wikibon Cube Insights powered by ETR. In this breaking analysis, we drill into the latest survey data on VMware from ETR. And we'll share with you the next iteration of the Supercloud definition based on feedback from dozens of contributors. And we'll give you our take on what to expect next week at VMware Explorer 2022. Well, VMware is maturing. You can see it in the numbers. VMware had a solid quarter just this week, which was announced beating earnings and growing the top line by 6%. But it's clear from its financials and the ETR data that we're showing here that VMware's Halcion glory days are behind it. This chart shows the spending profile from ETR's July survey of nearly 1500 IT buyers and CIOs. The survey included 722 VMware customers with the green bars showing elevated spending momentum, ie: growth, either new or growing at more than 6%. And the red bars show lower spending, either down 6% or worse or defections. The gray bars, that's the flat spending crowd, and it really tells a story. Look, nobody's throwing away their VMware platforms. They're just not investing as rapidly as in previous years. The blue line shows net score or spending momentum and subtracts the reds from the greens. The yellow line shows market penetration or pervasiveness in the survey. So the data is pretty clear. It's steady, but it's not remarkable. Now, the timing of the acquisition, quite rightly, is quite good, I would say. Now, this next chart shows the net score and pervasiveness juxtaposed on an XY graph and breaks down the VMware portfolio in those dimensions, the product portfolio. And you can see the dominance of respondents citing VMware as the platform. They might not know exactly which services they use, but they just respond VMware. That's on the X axis. You can see it way to the right. And the spending momentum or the net score is on the Y axis. That red dotted line at 4%, that indicates elevated levels and only VMware cloud on AWS is above that line. Notably, Tanzu has jumped up significantly from previous quarters, with the rest of the portfolio showing steady, as you would expect from a maturing platform. Only carbon black is hovering in the red zone, kind of ironic given the name. We believe that VMware is going to be a major player in cross cloud services, what we refer to as Supercloud. For months, we've been refining the concept and the definition. At Supercloud '22, we had discussions with more than 30 technology and business experts, and we've gathered input from many more. Based on that feedback, here's the definition we've landed on. It's somewhat refined from our earlier definition that we published a couple weeks ago. Supercloud is an emerging computing architecture that comprises a set of services abstracted from the underlying primitives of hyperscale clouds, e.g. compute, storage, networking, security, and other native resources, to create a global system spanning more than one cloud. Supercloud is three essential properties, three deployment models, and three service models. So what are those essential elements, those properties? We've simplified the picture from our last report. We show them here. I'll review them briefly. We're not going to go super in depth here because we've covered this topic a lot. But supercloud, it runs on more than one cloud. It creates that common or identical experience across clouds. It contains a necessary capability that we call a superPaaS that acts as a cloud interpreter, and it has metadata intelligence to optimize for a specific purpose. We'll publish this definition in detail. So again, we're not going to spend a ton of time here today. Now, we've identified three deployment models for Supercloud. The first is a single instantiation, where a control plane runs on one cloud but supports interactions with multiple other clouds. An example we use is Kubernetes cluster management service that runs on one cloud but can deploy and manage clusters on other clouds. The second model is a multi-cloud, multi-region instantiation where a full stack of services is instantiated on multiple clouds and multiple cloud regions with a common interface across them. We've used cohesity as one example of this. And then a single global instance that spans multiple cloud providers. That's our snowflake example. Again, we'll publish this in detail. So we're not going to spend a ton of time here today. Finally, the service models. The feedback we've had is IaaS, PaaS, and SaaS work fine to describe the service models for Supercloud. NetApp's Cloud Volume is a good example in IaaS. VMware cloud foundation and what we expect at VMware Explore is a good PaaS example. And SAP HANA Cloud is a good example of SaaS running as a Supercloud service. That's the SAP HANA multi-cloud. So what is it that we expect from VMware Explore 2022? Well, along with what will be an exciting and speculation filled gathering of the VMware community at the Moscone Center, we believe VMware will lay out its future architectural direction. And we expect it will fit the Supercloud definition that we just described. We think VMware will show its hand on a set of cross-cloud services and will promise a common experience for users and developers alike. As we talked about at Supercloud '22, VMware kind of wants to have its cake, eat it too, and lose weight. And by that, we mean that it will not only abstract the underlying primitives of each of the individual clouds, but if developers want access to them, they will allow that and actually facilitate that. Now, we don't expect VMware to use the term Supercloud, but it will be a cross-cloud multi-cloud services model that they put forth, we think, at VMworld Explore. With IaaS comprising compute, storage, and networking, a very strong emphasis, we believe, on security, of course, a governance and a comprehensive set of data protection services. Now, very importantly, we believe Tanzu will play a leading role in any announcements this coming week, as a purpose-built PaaS layer, specifically designed to create a common experience for cross clouds for data and application services. This, we believe, will be VMware's most significant offering to date in cross-cloud services. And it will position VMware to be a leader in what we call Supercloud. Now, while it remains to be seen what Broadcom exactly intends to do with VMware, we've speculated, others have speculated. We think this Supercloud is a substantial market opportunity generally and for VMware specifically. Look, if you don't own a public cloud, and very few companies do, in the tech business, we believe you better be supporting the build out of superclouds or building a supercloud yourself on top of hyperscale infrastructure. And we believe that as cloud matures, hyperscalers will increasingly I cross cloud services as an opportunity. We asked David Floyer to take a stab at a market model for super cloud. He's really good at these types of things. What he did is he took the known players in cloud and estimated their IaaS and PaaS cloud services, their total revenue, and then took a percentage. So this is super set of just the public cloud and the hyperscalers. And then what he did is he took a percentage to fit the Supercloud definition, as we just shared above. He then added another 20% on top to cover the long tail of Other. Other over time is most likely going to grow to let's say 30%. That's kind of how these markets work. Okay, so this is obviously an estimate, but it's an informed estimate by an individual who has done this many, many times and is pretty well respected in these types of forecasts, these long term forecasts. Now, by the definition we just shared, Supercloud revenue was estimated at about $3 billion in 2022 worldwide, growing to nearly $80 billion by 2030. Now remember, there's not one Supercloud market. It comprises a bunch of purpose-built superclouds that solve a specific problem. But the common attribute is it's built on top of hyperscale infrastructure. So overall, cloud services, including Supercloud, peak by the end of the decade. But Supercloud continues to grow and will take a higher percentage of the cloud market. The reasoning here is that the market will change and compute, will increasingly become distributed and embedded into edge devices, such as automobiles and robots and factory equipment, et cetera, and not necessarily be a discreet... I mean, it still will be, of course, but it's not going to be as much of a discrete component that is consumed via services like EZ2, that will mature. And this will be a key shift to watch in spending dynamics and really importantly, computing economics, the things we've talked about around arm and edge and AI inferencing and new low cost computing architectures at the edge. We're talking not the near edge, like, Lowes and Home Depot, we're talking far edge and embedded devices. Now, whether this becomes a seamless part of Supercloud remains to be seen. Look, if that's how we see it, the current and the future state of Supercloud, and we're committed to keeping the discussion going with an inclusive model that gathers input from all parts of the industry. Okay, that's it for today. Thanks to Alex Morrison, who's on production, and he also manages the podcast. Ken Schiffman, as well, is on production in our Boston office. Kristin Martin and Cheryl Knight, they help us get the word out on social media and in our newsletters. And Rob Hoffe is our editor in chief over at Silicon Angle and does some helpful editing. Thank you, all. Remember these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast. I publish each week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com or DM me @Dvellante or comment on our LinkedIn posts. Please do check out etr.ai. They've got some great enterprise survey research. So please go there and poke around, And if you need any assistance, let them know. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching, and we'll see you next time on Breaking Analysis. (lively music)